On January 1859 Karl Marx claimed the impact and the importance of any political institution to any society: “In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines
The central planners were overwhelmed and constrained by the complex demands of inflexible administration and the modern economy. The bulky procedures for bureaucratic administration excluded the free communication and flexible response which were required at the undertaking level for dealing with suppliers, customers, innovation, and worker alienation. In the period of 11 years from 1975 to 1985, corruption became common custom among bureaucracy to report the quotas which entrenched the crisis and satisfied targets. In 1986 Mikhail Gorbachev, by moving towards a market-oriented socialist economy, attempted to address problems of Russian economy, although policies of Gorbachev had failed to refresh the Soviet economy. Instead, Perestroika, a political movement for reformation within the Communist Party of the Soviet Union during the 1980s, set off a process of economic and political disintegration which culminated in the breakup of the Soviet Union in
Decadent and incident denationalization processes turned over the major stately owned firms to politic "oligarchs", which has left equity ownership highly concentrated (Economy.gov.ru). Yeltsin's program of radical, oriented market reform is called as a "shock therapy". It was based on the recommendations of a group of top economists from America and the IMF (the International Monetary Fund), including Larry Summers. There came a disastrous result, by 1999, with real GDP falling by more than 40%, hyperinflation was spreading rapidly which helped wipe out, crime, personal savings and destitution. The majority of state venture were privatized in amid that great subsequently and controversy came to be owned by insiders for far less than they were worth. For example, a factory’s director during the Soviet regime would become the owner of the same venture. Under the cover of the government, shameful financial manipulations were performed that joined hands to enrich a group of individuals at government and business key positions. Many of them quickly invested their new wealth abroad which produced a huge capital flight. Hardness in collecting government revenues in amid of the dependence on short-term and the collapsing economy borrowing to financial budget deficits led to the Russian